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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: DownSouth who wrote (86976)	8/18/1999 5:27:00 PM
From: Joey Smith	Respond to of 186894

All: Good article on 8-way Intel systems. joey biz.yahoo.com Wednesday August 18, 4:53 pm Eastern Time CORRECTED-Compaq takes aim at high-end In the Aug. 17 NEW YORK story ``Compaq takes aim at high-with new PC servers,' IN the 12th paragraph, please delete reference to Tuesday and begin, ``Hitachi Ltd.'s Hitachi Data Systems unit announced its first eight-way server in December, while most other...' instead of ``Also Tuesday, Hitachi Ltd.'s Hitachi Data Systems unit announced its own eight-way machine using the Intel-Compaq technology, with most other...' (corrects to show Hitachi unveiled its first eight-way server in December, not Tuesday). A corrected version follows: By Eric Auchard NEW YORK, Aug 17 (Reuters) - Compaq Computer Corp. (NYSE:CPQ - news), the world's top personal computer maker, on Tuesday took aim at the high-end business computer market with a new class of Intel-based PC servers it said offered competitive performance at roughly one third the price of UNIX machines. At a press conference, Compaq said it was targeting the exploding ``.com' market -- computers used to manage Web sites and handle online transactions. That market is a stronghold of Sun Microsystems Inc.(Nasdaq:SUNW - news), the No. 1 UNIX computer maker. ``We are delivering comparable performance to Sun at one-third the price,' Mary McDowell, general manager of Compaq's Industry Standard Server unit, claimed in an interview. After setbacks in its commercial desktop PC business crippled financial results this year and led to a house-cleaning of top management, the latest product introduction marked Compaq's return to an offensive game plan. ``For Compaq this is a stepping stone to reinvigorating their enterprise business,' said James Gruener, an industry analyst with Aberdeen Group in Boston. ``Enterprise' refers to the segment of Compaq's business targeted at large corporations, government agencies and educational institutions. These large accounts represent more than 50 percent of Compaq revenues and the bulk of its profits. The Compaq ProLiant 8000 and 8500 server series links eight Intel processors in one machine -- double the number of high-volume chips that could be strung together previously. The so-called eight-way ProLiant servers range in price from $20,000 to $80,000 and are due to begin shipping next week, company officials said. The new products are classic Compaq: PCs built around the fastest Intel chips and Microsoft Windows software available, and a recipe that calls for flooding the market for high-powered computers with millions of PCs at lower cost and equivalent performance. Compaq is hoping to capitalize on its dominant place in the worldwide PC server market, where it ships more units than both No. 2-ranked IBM and No. 3 Dell Computer Corp. (Nasdaq:DELL - news) combined, in order to topple Sun as the No. 1 computer supplier to Internet service providers. Compaq is No. 2 in terms of computers shipped in the Internet business market, but until now the company has mostly played in the low-end of the market, mainly supplying in-house departmental Web servers for businesses. Hitachi Ltd.'s Hitachi Data Systems unit announced its first eight-way server in December, while most other PC server makers are expected to jump in with eight-way machines of their own over the next week. Compaq believes it has a big jump on other computer makers due to its direct involvement with Corollary, a unit of Intel Corp. (Nasdaq:INTC - news), in developing the key eight-way chipset design of the PCs. But analyst Lou Mazzucchelli of brokerage Gerard Klauer Mattison cautioned that Compaq's technology lead over other PC makers will amount to six months at most and that in the long run it will be hard to maintain profit margins with little to differentiate Compaq other than mechanical design. ``The job of differentiating gets more and more difficult as this technology gets more common,' he said. At the news conference, Compaq said it would aggressively target the fast-expanding Internet Service Provider (ISP) and Applications Service Provider (ASP) markets. ASPs deliver software functions via online connections, freeing companies of the need to manage complex system in-house. Compaq said its goal was to become the No. 1 provider of computers to the ISPs and ASPs by 2001, a market that is estimated to grow to $27.2 billion within two years from $7.85 billion currently. Shares of Compaq rose 50 cents following the news to close at $24.125 on the New York Stock Exchange. Sun stock, which fell as much as $2 during the day, recovered to close at $74.81, off 12.5 cents on the Nasdaq stock market.